Rekt Mkts: Dem sweep...crypto rebounds after the vote

Well, the Dem sweep has happened and markets have recovered from the overnight selling. Yday's question was whether getting the election out of the way could help...and indeed the recovery is encouraging, but the route here shows why getting the outcome right didn't necessarily make it an easy trade. Crypto is finally giving ppl some relief too, with ETH ahead of BTC and ZEC doing considerably more. The result hasn't removed the concerns around AI spending and earnings, and the policy risk has become more concrete, but that hasn't stopped the wider market recovering and it just sort of feels like we can all get on with our lives now. Next big event for me is gonna be the Anthropic IPO and if we can just get calmer waters for it to come, it gives a great chance of turning fortunes.

Gold futures are around $4,054, up 2.9%, while WTI is around $93.47, down 2.7%. Oil is giving markets more relief, while gold has recovered yday's decline. The US 10Y is around 4.93%, down roughly 2bps from yday's close near 4.95%. That's a partial reversal of Tuesday's rise, with both oil and yields moving in a friendlier direction today.

S&P 500 and Nasdaq-100 futures have recovered their overnight losses, with both starting the day up 2%, but the rebound hasn't carried through to every AI name. Meta is up around 1.5%, while Nvidia is down 1%, Micron 4%, Sandisk 5% and Nebius 4%. Yday's chip bounce hasn't continued across those names, even with the election uncertainty easing - it tells you that the AI capex/debt story is still a concern. Incoming Texas governor Gina Hinojosa campaigned on a moratorium on new data centres in a state that's become an important hub for the buildout. Georgia also elected a governor who campaigned on a moratorium. That could make bringing capacity online harder, rather than mean customers have suddenly stopped wanting compute...campaign pledges still aren't enacted restrictions, but the political opposition now has more power behind it. That helps explain why relief elsewhere doesn't necessarily translate into another good day for AI infrastructure stocks. Korean memory also finished slightly lower, with SK Hynix down 0.1% and Samsung 0.7%, while Kioxia fell another 5.4%. Kioxia's much larger decline extends the weakness discussed on Monday, rather than showing the same selling across every memory name.

BTC is up around 2.4% over 24H, ETH 3.8% and SOL 1.7%, while HYPE is down 0.8%. ETH is leading this recovery among the majors, and SOL has joined in too. That's a much better response than the pre-election weakness in yday's brief, altho HYPE is still going the other way. US spot BTC ETFs lost $115.6m yday, their third consecutive session of outflows. ETH funds lost $85.3m in their seventh consecutive session of outflows. Withdrawals slowed from Monday for both, but neither has yet reversed into inflows. ZEC is up 11% and VVV 4.1% over 24H, with their BTC ratios up around 8.3% and 1.7% respectively over the same period. ZEC's rebound was already getting going in yday's brief despite the weak trailing return...today it's showing up much more clearly in the 24H numbers too. It's doing considerably more than just following BTC higher and the market seems to have taken the Dem sweep positively for the coin...I guess because of some sort of TINA (there is no alternative) narrative? Good luck today.